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Speed up reporting on consolidated (defaulted) student loan?

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Contributor

Speed up reporting on consolidated (defaulted) student loan?

Hello,

 

I am getting a student loan consolidation to get it out of default.  Once it is complete what is the fastest way to get the US department of education reporting to reflect that the loan is no longer in default?  I was considering doing a dispute on it as soon as I have the loan papers in hand and can send them to the credit bureau.  Has anyone got any other ideas?

Message 1 of 16
15 REPLIES 15
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

Like you I applied for a Consolidation Loan to get 2 small loans out of default. I received notice from the new servicer the loans were cnsolidated on 6/12/17, however, my original lender only shows 3 of my 11 loans paid off...the defaulted ones are still showing as "default" on NSLDS website. I assume it takes a few weeks for the disbursements to update online, and possibly another 2-6 weeks to update on our credit report.

 

However, log on to your account with the defaulted student loan servicer, and check for the "payment history" to see if your loans have been paid. As soon as you see them, download or print a copy of the payments showing the $0.00 balance. I would download a copy of all your loan info while you have access still and save for your records.

 

My default is handled by the Default Resolution Group. A phone rep advised me to send a copy to show the loans have been paid and consolidated (you'd think they can check their own rcrods), and a letter to ask them to "update" the information reported on my credit file. I plan to do just this

 

If it doesnt work, I will send a 2nd letter to remind them "as the "furnisher" they have a duty to "correct" and "update"  info to CRA's regardless of whether the furnished info was accurate at one point" under FCRA §623(a), and hope that THIS will at least work. 

 

I am giving it till July 12, 2017, the date my 1st payment is due then I may dispute it with the CRA's if my accounts have not updated yet. 

 


Message 2 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

Thank you for the reply.  How long did you wait from the time you applied until it was completed?  I was told that I could speed up having it approved by asking them to waive the 10 day period that they give me to make any changes to the loan.  Did you do that or did you wait the 10 days?

Message 3 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

That is what I did. I waived my "waiting period" and regretted it the next day. Literally! I stupidly had them add my oldest loan to the consolidation and didn't consider the effects on my credit score when my oldest accounts are closed. I realized what I had done but was told I was now locked in b/c I waived my waiting period.

 

I waived my waiting period on Wed. I received the final documents with the repayment plan for 2017 by Fri. By Mon. the loans were paid. By Thurs. I saw 3 of my loans were paid, $0 balance, with "consolidated" notated by each payment. It's been 1 week and still waiting for the rest of the loans to update as "paid" now. Haven't checked today yet though. 


Message 4 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

What date did they actually receive the consolidation application?
Message 5 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

They received my application 5/19/17.

 

Just confirmed my defaulted loans were paid off on 6/12/17. Navient seems to be dragging their heels with updating my account of all the payments they received.


Message 6 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

So the new servicer sent you a notice saying the loans were paid?  Would they be the one to give you a default clearance letter or would that be whoever had them before consolidation (navient)?

Message 7 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

I was told to request it from the previous servicer (whoever is actively reporting the default)...in my case my defaults has been with the Dept. of ED "Default Resolution Group". So I would send a letter or give them a call. Be aware though...see how its reporting on your report  now and decide if its necessary to contact the old servicer or whether its best to wait a bit and dispute it directly with the CRA's.

 

*This is just my opinion though so hopefully others will share their experiences. 

 

I am not very hopeful I will have much success with the DOE though. I just now read that consolidating the loans will NOT mean the "derogatory" will be removed BEFORE it's due to fall off. Only those who have "rehabilitated" defaulted loans can have tthe "credit killer" marks moved before it falls off. Sadly no one tells us this before hand! That should have been in the Consolidtion Loan application terms and conditions and I would have just rehabilitated first. 

 

If the default is actively reporting monthly now, than yes, maybe its best to contact the servicer versus the CRA later. However, in my case, my defaulted loans are listed as "closed" since 10/26/16, and "IIB". My score and file are ok for now that I dont want to rush into it and cause a significant score drop or negative report change by requesting the DOE to even look at my credit file, lol.

 

I may wait to see IF and WHAT, if any, the DOE reports now that the loans are paid. Unless they update and it's hurting me, I am thinking I may wait a few months, maybe longer, and then dispute it directly with the CRA's in hopes that they will just remove the negatives after receiving the documentaiton of the consolidation. 

 

Again, I am just sharing what my thoughts are now that I know I may have a hard time getting the "derog's" removed EVEN THOUGH the phone rep at DOE advised me send them my paperwork to have them update my credit file. 

 


Message 8 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

So far, the loan servicer's always make it seem like sending a letter and proof will easily get us the results we are hoping for...but not even 1 servicer has removed, updated, or corrected anything. I am just going to keep being persistant and hope to get somewhere. 


Message 9 of 16
Contributor

Re: Speed up reporting on consolidated (defaulted) student loan?

 


@liv22 wrote:

So far, the loan servicer's always make it seem like sending a letter and proof will easily get us the results we are hoping for...but not even 1 servicer has removed, updated, or corrected anything. I am just going to keep being persistant and hope to get somewhere. 


Oh Boy!  Yeah, after reading your post I visited the student aid website and sure enough it said it will not remove the default from the credit file.  So I just shot my loan officer an email asking him if a consolidation to get it out of default will be enough to get us a mortgage or if we need to pay the 9 monthly payments to rehabilitate it.  Nothing is ever easy when you do not pay your student loan!  Smiley Surprised

Message 10 of 16
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